When data privacy became a startup’s nightmare

Recently, Twitter Inc. filed a lawsuit against the Indian government for what it deemed “arbitrary” and “disproportionate” orders to remove content and restrict accounts.

WhatsApp, a service of Meta Platforms Inc., filed a lawsuit in New Delhi last year to challenge the country’s new internet regulations requiring traceable discussions. The messaging service claims that such a requirement will force it to return on its pledge of end-to-end encryption, putting journalists and political activists at considerable risk.

It was revealed that the company had been forced to provide customer information in a police probe against the fact-checking website Alt News, which irritated Prime Minister Narendra Modi’s Hindu, right-wing Bharatiya Janata Party to no end; the company unintentionally caused a stir. 

At the techie-turned-bail journalist’s hearing on July 2, a public prosecutor informed the magistrate that money was sent to Alt News “via Razorpay from Pakistan, Syria, Australia, Singapore, and the UAE, which all require additional investigation,” according to the prosecutor.

In other words, the police investigation is about the overseas location of devices used for payment, which does not indicate that the donation itself was from foreigners, at least based on what the prosecution has divulged thus far.

Razorpay users are justified to wonder why the company allowed the police to easily access the data of Alt News donors, perhaps putting clients at risk of harassment due to their political beliefs. 

Thinking that Razorpay could have obtained a court order quickly to quash the Delhi Police’s notification is wishful thinking that ignores the realities of conducting business in the nation.

A data protection regulation, which has been in the works for five years, is the only thing organizations like Razorpay have to hope for. The police’s Section 91 notification in the Razorpay scandal should have gone through the Reserve Bank of India.

According to Ameet Datta, a tech privacy lawyer in Delhi, “One cannot over-emphasize the value of civil-society organizations in the country’s progress”. Founders also worry about their safety: They should not be detained for obstructing justice when the information they are being asked for is out of proportion to the state’s inquiry or unrelated to its professed goals. 

However, as the Razorpay incident has shown, India’s smaller businesses may represent a more significant threat to both its democracy and its digital economy.